SCORE St. Paul Client Resource Guide vers. 2 St. Paul... · SCORE St. Paul Client Resource Guide...

SCORE St. Paul Client Resource Guide

This guide is a quick reference to some useful templates and learning resources available to our clients as they navigate starting a business. Note, you must have Adobe Acrobat or Reader installed on your device for this interactive PDF to work. To download the Adobe Reader CLICK HERE

Legal Resources

Marketing Resources

Finance Resources

Business Templates

Local Workshops

Market Research

SCORESt. Paul

Start-up Guides

Business Planning

Vers. 2.0

Read Me
https://www.facebook.com/SCOREStPaul/https://www.linkedin.com/company/score-st-paul/https://twitter.com/SCOREstpaulhttps://get.adobe.com/reader/otherversions/https://stpaul.score.org/https://stpaul.score.org/content/take-workshop-65https://www.score.org/resource/business-planning-financial-statements-template-gallery?_ga=2.129538828.1215609376.1523219846-1795043358.1523219846

On-line guide to doing business in St. Paul

Steps to Forming a Nonprofit

SCORE QuickStart Guide for Starting a Business

SBA Checklist for Starting a Business

Links to publications

Start-up GuidesSCORE St. Paul Client Resource Guide

Minnesota SBA Small Business Resource Guide

Pierce County, WI Economic Dev Corp Start up Checklist

Wisconsin SBA Small Business Resource Guide

Small BusinessTrends

Minnesota Business Magazine

EntrepreneurMagazine

These references provide some great primary guidance to starting a business here in Minnesota and Western Wisconsin.
https://www.stpaul.gov/businesses/open-business/opening-businesshttps://www.sba.gov/sites/default/files/articles/Resource_Guide_2017_0.pdfhttp://www.pcedc.com/pierce/business-toolbox/business-start-up-checklisthttps://www.sba.gov/sites/default/files/files/resourceguide_3158.pdfhttp://minnesotabusiness.com/magazine-subsection/startupshttps://smallbiztrends.com/https://www.entrepreneur.com/

Market Research

James J Hill Center free access to all resources is internal @ JJ Hill no external access. For 1:1 assistance, membership is required. Key start-up resources include: Market research: SimplyAnalytics Industry research: IBIS World Competitor & marketing research: AtoZ Database


James J HillResearch Center

Ramsey CountyLibrary

NAICSAmerican

Community Survey

Small Business

Administration

Bureau of Economic Analysis

Securities and Exchange

Commission

Bureau of Labor and Statistics

St. PaulLibrary

Broader Research Sources here are a number of other demographic, industry and economic resources:

Ramsey County Library and St. Paul Library access to the digital resources from the St. Paul and Ramsey County Library can be made at the library or remotely providing you have a library card. Competitor & prospect research: Reference USA
http://jjhill.org/research/https://sppl.bibliocms.com/resources/business/https://www.rclreads.org/research/subject-guide/37/business-and-financehttps://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysishttps://www.naics.com/https://www.census.gov/programs-surveys/acs/https://www.census.gov/programs-surveys/acs/https://www.sec.gov/https://www.bls.gov/

Business PlanningSCORE St. Paul Client Resource Guide

Putting together a business plan that works for you isnt as challenging as you might fear. The key: keep it simple. Check these out, then, as needed, call upon a SCORE mentor or attend a workshop in your area.

LivePlan Business Plan

Template

Lean Startup Template

Lean Startup Changes

Everything

How To Really Start Your Own Business

LivePlan Overview

SBA Business Planning Resources

LivePlan is an intuitive on-line business plan application that makes generating a business plan, including financials easy, consistent and professional. To evaluate use of this tool click HERE.

Lean Startup Canvas focuses on summarizing the most important elements of your plan and is designed to provide a simple baseline for creating your business plan.

SBA Business Plan Resources are on-line business plan tools providing a traditional business plan and the Lean Startup Canvas templates.

Whatever approach you take to building your plan, the interactive guide, How to Really Start Your Own Business is a great resource to the questions youll need to answer while putting your plan together.
https://hbr.org/2013/05/why-the-lean-start-up-changes-everythinghttps://www.sba.gov/business-guide/plan-your-business/write-your-business-planhttps://www.youtube.com/watch?v=aAWud9_g_Kchttps://partners.liveplan.com/score-st-paul-6mo

Marketing Resources

Heres a simple way to think of marketing: understand your customer, your value, your competition, your differential advantage and ultimately you plan of execution. Here are a few useful resources:


General MarketingResources On-line

MarketingResources

SCORE

SBA

Canva Visual Style Guide 99 Designs

Create Brand Style Guide

MarketingCalendars

Execution Calendars & Schedules

Branding ResourcesMarketing Plan GuidelinesGeneral Marketing Resources

Our strategic partner, Deluxe, has developed a number of easy to use small business marketing resources designed to help with understanding marketing fundamentals, web site design, email marketing and social media marketing. These easy to understand guides provide a terrific foundation to building your marketing plan!

Guide to Website Design

Guide to Advertising on

Facebook

Guide to Email List

Management

Marketing Fundamentals
https://www.score.org/search/site/marketinghttps://www.score.org/content/online-marketing-resourceshttps://www.score.org/resource/marketing-plan-guidehttps://www.sba.gov/business-guide/manage-your-business/marketing-sales#section-header-0https://www.canva.com/learn/your-brand-needs-a-visual-style-guide/https://99designs.com/blog/logo-branding/how-to-create-a-brand-style-guide/https://www.deluxe.com/sbrc/marketing/marketing-fundamentals-8-ways-to-reach-new-customers-starting-todayhttps://www3.deluxe.com/guide-to-websites?pscid=DLX:MF_eBook_2_DLX:Guide_To_Websiteshttps://www3.deluxe.com/guide-to-email-list-management?pscid=DLX:MF_eBook_2_DLX:Guide_To_Email_List_Managementhttps://www3.deluxe.com/guide-to-facebook-advertising/?pscid=DLX:MF_eBook_2_DLX:Guide_To_Facebook_AdvertisingAnnual Marketing CalendarANNUAL MARKETING CALENDARQ1Q2Q3Q4JANUARYFEBRUARYMARCHAPRILMAYJUNEJULYAUGUSTSEPTEMBEROCTOBERNOVEMBERDECEMBEREnter date of first Monday each month4111825-181522297142128-4111825-291623306132027-4111825-181522295121926-3101724317142128-5121926-Basic MarketingBusiness cardsBrochures & Sell SheetsWhite papersPostersPostcardsTestimonialsDirect MailIn-Store MarketingPOPSpecial EventsTrade showsSeminarsOpen housesPublic speakingNetworking eventsSeminarsPublic RelationsPress releasesMagazine or NP articlesSponsorshipsPress ReleasesSocial MediaTwitterLinkedInFacebookPinterestOnlineWebsiteEmail campaignsBlogPartner website cross mktg.Mobile AppMobile AlertsDirectory site listings (eg; Angie's List)AdvertisingOnlineNewspaper adsMagazine adsInfomercialsOutdoorRadioTelevisionMarket ResearchSurveysImpact StudiesMarketing Campaign CalendarMARKETING CAMPAIGN CALENDARJANUARYFEBRUARYMARCHAPRILMAYJUNEJULYAUGUSTSEPTEMBEROCTOBERNOVEMBERDECEMBERJANUARYDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS12345678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHFEBRUARYDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter67891011121314151617181920212223242526272829ADDITIONAL NOTES FOR THE MONTHMARCHDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHAPRILDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter6789101112131415161718192021222324252627282930ADDITIONAL NOTES FOR THE MONTHMAYDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHJUNEDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter6789101112131415161718192021222324252627282930ADDITIONAL NOTES FOR THE MONTHJULYDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHAUGUSTDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHSEPTEMBERDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter6789101112131415161718192021222324252627282930ADDITIONAL NOTES FOR THE MONTHOCTOBERDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHNOVEMBERDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter6789101112131415161718192021222324252627282930ADDITIONAL NOTES FOR THE MONTHDECEMBERDATEACTIVITYCAMPAIGN TITLEDESCRIPTIONAUTHORPERSON / DEPT RESPONSIBLESTATUSCALL TO ACTIONCATEGORYMETADATAPLATFORMMEASUREMENTS OF SUCCESSCOMMENTS1Advertising - OutdoorBus Shelter2Advertising - PrintMint Gazette3EventTradeshow4Email MarketingEmail5Social MediaTwitter678910111213141516171819202122232425262728293031ADDITIONAL NOTES FOR THE MONTHOr Click Here to Create a Marketing Campaign Calendar with Smartsheethttps://www.smartsheet.com/try-it?trp=8600&utm_source=integrated+content&utm_campaign=/9-free-marketing-calendar-templates-excel&utm_medium=%20marketing+campaign+calendar+template&lx=6-RG-9LX5xUaWoA_Pjw2x12F3tjZfBYMXSEruozjq1EEmail Marketing CalendarEMAIL MARKETING CALENDARDATE SENTCONTENT TOPICEMAIL TITLESUBJECT LINECONTENTIMAGESLINKDAYS UNTIL SUBSCRIPTIONCOMMENTSSocial Media Marketing CalendarSocial Media Calendar for a Small BusinessMonday TuesdayWednesdayThursdayFridayFacebook Post link to content from your blog with short updateShare community contentPost an interesting question to the communityCreate an original image-based postShare humorous fun content (cartoon, meme, video, etc.)Share a promotional item, special offer, freebie.Remind people to join your mailing list and the benefits they get if they do.Google PlusShare community contentWrite a 300-word original piece about a recent development in your industry. Share community contentPost link to content from your blog with short update. Post humorous fun content (cartoon, meme, video, etc.)Share a promotional item, special offer, freebie.PinterestPin community content on your company boardsSet up a new themed board under your company Pinterest accountPin your own blog or ecommerce content on your company boardsPin community content on your company boardsPin your own blog or ecommerce content on your company boardsTwitterRetweet community contentCompose tweet linking to content from your blog Compose tweet linking to content from your blog using an image, or link to community contentCompose tweet linking to content from your blog or the communityRetweet community contentShare a promotional item, special offer, freebie.Remind people to join your mailing list and the benefits they get if they do.#ThrowbackThursday - Participate by sharing old personal photos, old fashion trends, old technology, etc. from years gone by for engagement.*#FF Follow Friday - Participate by thanking new followers in a tweet they're tagged in.*LinkedInParticipate in Linked Groups, posting comments and/or community linksPost link to content from your blog as a short update on your personal LinkedIn profilePost link to content from your blog on your LinkedIn company pageWrite a long form post on LinkedIn adapting content from your blog and linking back to your blog for more.Participate in Linked Groups, posting comments and/or community links[ List other social media platforms ]All PlatformsCheck for and respond to @Mentions, replies, comments and messages Check for and respond to @Mentions, replies, comments and messages Check for and respond to @Mentions, replies, comments and messagesCheck for and respond to @Mentions, replies, comments and messages Check for and respond to @Mentions, replies, comments and messagesOnce per week check new followers on each platform. Choose and add those you want to followINSTRUCTIONS: Change the activities to fit your business. The suggested activities are merely idea starters. Do not feel pressured to do every activity. This calendar was created by Small Business Trends LLC. It is protected by a Creative Commons license, Attribution, Noncommercial, ShareAlike. If you share or use this calendar outside of your company, please give credit to Small Business Trends http://smallbiztrends.comFor tips and advice, or for other formats for this calendar, please visit our Social Media Calendar for Small Business page.Rev. 10/15https://twitter.com/hashtag/throwbackthursdayhttps://twitter.com/hashtag/followfridayhttps://creativecommons.org/licenses/by-nc-sa/4.0/legalcodehttp://smallbiztrends.com/http://smallbiztrends.com/social-media-calendar-for-small-business/http://smallbiztrends.com/social-media-calendar-for-small-business/Digital Marketing ResourcesDigital Marketing Resources5/1/18Websites -LevelToolWebsiteWebsite Design & DevelopmentBasicWixhttps://www.wix.com/BasicSquarespacehttps://www.squarespace.com/BasicWord Presshttps://wordpress.com/AdvancedAdobe CQ5http://www.adobe.com/#Search & Display LevelToolWebsiteGeneral Keyword ResearchBasicGoogle Keyword Plannerhttps://adwords.google.com/home/tools/keyword-planner/BasicBing Keyword Plannerwww.bing.com/toolbox/keywordsBasicGoogle Insightswww.google.com/insightsSEO MonitoringBasicMOZ pluginhttps://moz.com/MediumSEM Rushhttps://www.semrush.com/SEO Page Element DiagnosticsMediumScreaming Froghttps://www.screamingfrog.co.uk/Display Campaign PlanningBasicGoogle Display Plannerhttps://adwords.google.com/home/#?modal_active=noneLanding Page DevelopmentMediumUnbouncehttps://unbounce.com/BasicLeadPageswww.leadpages.netOn-site OptimizationMediumVWOwww.vwo.comAdvancedOptimizelywww.optimizely.comEmail Marketing LevelToolWebsiteImage CreationBasicCanvahttps://canva.comSocial Human IntelligenceBasicCrystalhttps://www.crystalknows.comMeasurementModerate/AdvancedGoogle Analyticshttps://google.com/analyticsEmail Marketing DefinitionsBasicHubspothttps://blog.hubspot.com/blog/tabid/6307/bid/7595/The-Ultimate-Glossary-44-Email-Marketing-Terms-Marketers-Must-Know.aspxSetting Business GoalsBasic/ModerateNew Found Balancehttp://www.newfoundbalance.com/new-year-new-goals/Aligning Email to Buyers JourneyModerateSleek Noteshttps://sleeknote.com/blog/the-buyers-journeyEmail Marketing GuidebookBasic/ModerateCampaign Monitorhttps://www.campaignmonitor.com/resources/guides/modern-guidebook-email-marketingGmail DeliverabilityBasic/ModerateReturn Pathhttps://blog.returnpath.com/gmail-deliverability-weirder-think/Email Address CollectionBasic/ModerateGeniece Brownhttp://geniecebrown.com/17-places-to-collect-email-addresses/Aligning Email to Buyers JourneyBasicGet Responsehttps://blog.getresponse.com/uploads/2015/08/marketing_funnel_poster.jpgGmail DeliverabilityBasic/ModerateChamaileon.iohttp://blog.chamaileon.io/how-to-get-your-emails-delivered-to-the-gmail-primary-tab-easily/Email AutomationBasic/ModerateVertical Responsehttp://www.verticalresponse.com/blog/email-automation-101-infographic/Social Media Marketing LevelToolWebsiteSocial media content toolsBasicCanvawww.canva.comBasicPiktochartwww.Piktochart.comMediumPowtoonwww.Powtoon.comSocial media monitoring toolsMediumFanPage Karmawww.FanPageKarma.comMediumSysomoswww.Sysomos.comSocial Media PlatformsBasicHootSuitewww.HootSuite.comAdvancedKomfowww.Komfo.comMobile MarketingLevelToolWebsiteCost of developing an appBasicwww.howmuchtomakeanapp.comApp reportingBasicwww.appfigures.comBasicwww.appannie.comhttp://www.bing.com/toolbox/keywordshttp://www.newfoundbalance.com/new-year-new-goals/https://sleeknote.com/blog/the-buyers-journeyhttps://www.campaignmonitor.com/resources/guides/modern-guidebook-email-marketinghttps://blog.returnpath.com/gmail-deliverability-weirder-think/http://geniecebrown.com/17-places-to-collect-email-addresses/https://blog.getresponse.com/uploads/2015/08/marketing_funnel_poster.jpghttp://blog.chamaileon.io/how-to-get-your-emails-delivered-to-the-gmail-primary-tab-easily/http://www.verticalresponse.com/blog/email-automation-101-infographic/http://www.canva.com/http://www.piktochart.com/https://unbounce.com/http://www.powtoon.com/http://www.fanpagekarma.com/http://www.sysomos.com/http://www.hootsuite.com/http://www.komfo.com/http://www.howmuchtomakeanapp.com/http://www.appfigures.com/http://www.appannie.com/https://www.wix.com/https://www.squarespace.com/http://www.leadpages.net/https://wordpress.com/http://www.adobe.com/https://adwords.google.com/home/tools/keyword-planner/http://www.google.com/insightshttps://moz.com/https://www.screamingfrog.co.uk/http://www.vwo.com/http://www.optimizely.com/https://google.com/analyticshttps://canva.com/https://www.crystalknows.com/https://blog.hubspot.com/blog/tabid/6307/bid/7595/The-Ultimate-Glossary-44-Email-Marketing-Terms-Marketers-Must-Know.aspxDouble Click to OpenFile AttachmentOutbound Marketing Calendars & Schedules.xlsx

Finance ResourcesSCORE St. Paul Client Resource Guide

Here are a some resources youll find useful for the financial planning aspects to starting your business. While not exhaustive, theyll get you started. For more detail and help be sure to check with your SCORE mentor.

Glossary of Financial Terms

Simple One Year P&L Template

Simple Three Year Forecast & Profit Projections

Financial Projections Template and Guide

This Excel template will help you calculate startup expenses, payroll, sales forecast, cash flow, income statement, balance sheet, break-even, cost of goods sold, amortization and depreciation for your small business.

SBA Funding Resources

SBA Course: Introduction to Accounting

Funding and financing options Guide to Financing

IRS References and GuidesUseful SBA and IRS resources
https://stpaul.score.org/resource/financial-projections-templatehttps://www.sba.gov/business-guide/plan-your-business/fund-your-businesshttps://www.sba.gov/course/introduction-accounting/millerharrySticky NoteAccepted set by millerharryThree-Yr Profit ProjectionProfit and Loss Projection (3 Years)Enter your Company Name hereEnter starting year here2019%2020%2021%Sales$ -100.00%$ -100.00%$ -100.00%Cost/ Goods Sold (COGS)------Gross Profit$ -
Mitali Pattnaik: Totals and percentages are calculated automatically.-$ --$ --Operating ExpensesSalary (Office & Overhead)$ --$ --$ --Payroll (taxes etc.)------Outside Services------Supplies (off and operation)------Repairs/ Maintenance------Advertising------Car, Delivery and Travel------Accounting and Legal------Rent & Related Costs------Telephone------Utilities------Insurance------Taxes (real estate etc.)------Interest------Depreciation------Other expense (specify)------Other expense (specify)------Total Expenses$ --$ --$ --Net Profit Before Taxes---Income Taxes---Net Operating Income---
Notes on PreparationYou may want to print this information to use as reference later. To delete these instructions, click the border of this text box and then press the DELETE key.A long term forecast is not a necessary part of a basic business plan. However, it is an excellent tool to help you open up your thinking about the company's future. Furthermore, venture capitalists will almost always want a long term forecast to get a feel for growth prospects.The further out you forecast, the less accuracy you can maintain, so use round numbers, except where you know exact amounts; e.g.: rent expense if you have a long term lease.The most important part of the long term forecast is not the numbers themselves, but the assumptions underlying the numbers. So make sure your assumptions are stated clearly and in detail in a narrative attachment. This will communicate your vision of the company's future and how you anticipate realizing that vision.You will note that there are some lines on the bottom of this spreadsheet which may not be on a twelve-month P & L. This is to help you do some planning about funding growth:- NET PROFIT BEFORE TAX is the same as Net Profit on a 12-month Profit and Loss spreadsheet.- INCOME TAX allows you to estimate how much of your profit will have to go to the IRS.- NET PROFIT AFTER TAX is what is left for you to use.- OWNER DRAW/ DIVIDENDS is how much the owners plan to take out for themselves.- ADJUSTMENT TO RETAINED EARNINGS is the amount of profit actually left in the business to increase Owners' Equity and fund growth.
Doublke Click to OpenFile Attachment3 Year Profit Projection.xlsxPnL projectionProfit and Loss Projection (12 Months)Enter your Company Name hereFiscal Year BeginsJan-18Jan-18Feb-18Mar-18Apr-18May-18Jun-18Jul-18Aug-18Sep-18Oct-18Nov-18Dec-18YEARLYRevenue (Sales)Category 10Category 20Category 30Category 40Category 50Category 60Category 70Total Revenue (Sales)0000000000000Cost of SalesCategory 10Category 20Category 30Category 40Category 50Category 60Category 70Total Cost of Sales0000000000000Gross Profit0000000000000ExpensesSalary expenses
Microsoft: Sales people, office & others.0Payroll expenses
Microsoft: Taxes, etc.0Outside services0Supplies (office and operating)0Repairs and maintenance0Advertising0Car, delivery and travel0Accounting and legal0Rent & Related Costs0Telephone0Utilities0Insurance0Taxes (real estate, etc.)0Interest0Depreciation0Other expenses (specify)0Other expenses (specify)0Other expenses (specify)0Misc. (unspecified)0Sub-total Expenses0000000000000Reserve for Contingencies 0000000000000Total Expenses0000000000000Net Profit Before Taxes0000000000000Federal Income TaxesState Income TaxesLocal Income TaxesNet Operating Income0000000000000
Notes on PreparationYou may want to print this information to use as reference later. To delete these instructions, click the border of this text box and then press the DELETE key.You should change "category 1, category 2", etc. labels to the actual names of your sales categories. Enter sales for each category for each month. The spreadsheet will add up total annual sales. COST OF GOODS SOLD (also called Cost of Sales or COGS): COGS are those expenses directly related to producing or buying your products or services. For example, purchases of inventory or raw materials, as well as the wages (and payroll taxes) of employees directly involved in producing your products/services, are included in COGS. These expenses usually go up and down along with the volume of production or sales. Study your records to determine COGS for each sales category. Control of COGS is the key to profitability for most businesses, so approach this part of your forecast with great care. For each category of product/service, analyze the elements of COGS: how much for labor, for materials, for packing, for shipping, for sales commissions, etc.? Compare the Cost of Goods Sold and Gross Profit of your various sales categories. Which are most profitable, and which are least - and why? Underestimating COGS can lead to under pricing, which can destroy your ability to earn a profit. Research carefully and be realistic. Enter the COGS for each category of sales for each month. In the "%" columns, the spreadsheet will show the COGS as a % of sales dollars for that category.GROSS PROFIT: Gross Profit is Total Sales minus Total COGS. OPERATING EXPENSES (also called Overhead): These are necessary expenses which, however, are not directly related to making or buying your products/services. Rent, utilities, telephone, interest, and the salaries (and payroll taxes) of office and management employees are examples. Change the names of the Expense categories to suit your type of business and your accounting system. You may need to combine some categories, however, to stay within the 20 line limit of the spreadsheet. Most operating expenses remain reasonably fixed regardless of changes in sales volume. Some, like sales commissions, may vary with sales. Some, like utilities, may vary with the time of year. Your projections should reflect these fluctuations. The only rule is that the projections should simulate your financial reality as nearly as possible. NET PROFIT: The spreadsheet will subtract Total Operating Expenses from Gross Profit to calculate Net Profit.INDUSTRY AVERAGES: Industry average data is commonly available from industry associations, major manufacturers who are suppliers to your industry, and local colleges, Chambers of Commerce, and public libraries. One common source is the book Statement Studies published annually by Robert Morris Associates. It can be found in major libraries, and your banker almost surely has a copy. It is unlikely that your expenses will be exactly in line with industry averages, but they can be helpful in areas in which expenses may be out of line.
Double Click to OpenFile Attachment1 Year Profit and Loss Projection.xlsx

Legal Resources

There are many resources available addressing multiple areas of business law and governance. The below are just a few you may find helpful in address some of the basics to starting your business:

LegalCorps Minnesotas premier legal resource center provides a tremendous service to the local business community check these resources for more info:


Information on LegalCorps

LegalCorps Walk-in Center Information

Entity Formation Overview

Intellectual Property Overview

Other core resources

LegalCorps Resources for Small Business

FindLaw Business Start-up Checklist

LawDepot Basic Contract Templates
http://legalcorps.org/https://stpaul.score.org/content/legalcorps-advice-st-paul-scorehttp://legalcorps.org/small-businesseshttps://smallbusiness.findlaw.com/starting-a-business/business-start-up-checklist.htmlhttps://www.lawdepot.com/

This guide is a simple PDF with links to web pages and documentation youll find useful. Youll need either the free Adobe Reader or Acrobat to get the full benefit of using this tool. If you dont have this, go to: https://get.adobe.com/reader/otherversions/. Your feedback on this guide is

welcome just drop us a note at [email protected].

Home PageLive links to some of the SCORE St. Paul on-line resources simply click once and youll be linked to the page via your preferred browser

Links to pages in the PDF related to each area of interest click once and the page will be presented

Social media links

ReadMeSCORE St. Paul Client Resource Guide

Resource PagesBelow is one of the resource pages in the guide. A couple of pointers:

Click once and youll return to the Home Page

Clicking on a topic will take you to a web page or an embedded document.

Where you see a push pin, this is a link to an embedded Excel file just double click and the document will open in Excel. If youre using another spreadsheet application, youll be asked which app should open the file.

Note, when using this document on a tablet device or Chromebook laptop, you can navigate from page to page within the document and to external web resources. The functionality of opening attachments however, does NOT work on a tablet device or a Chromebook laptop at this time.

Steps to Forming a Nonprofit: Visionary Stage

Step 1: Determine if it is Necessary to Start a Nonprofit. Is starting a new nonprofit organization really the best way to accomplish the goals you have set forth? Other alternatives, including collaborating with an existing nonprofit organization, establishing an unincorporated association, finding a fiscal sponsor or forming a for-profit business, may achieve your objectives quicker, more efficiently, and for the greatest benefit foryour target audience.

Step 2: Decide on the Purpose and Mission. The purpose of a charitable nonprofit must be for the public interest and common good. It should establish a single mission and a set of goals and programs that will accomplish that mission. During this step, a new nonprofit should analyze what it wants to do, who it wants to reach, and how it wants to impact society. A mission statement should be brief, timeless and descriptive of what the organization is trying to accomplish. This statement will guide the organization through not only its initial formation, but also future program development, growth and change.

Step 3: Recruit Board Members. The initial board of directors will assume much of the responsibility in starting a new nonprofit. They will determine the direction and goals of the organization and set forth precedents for future board members. The first board writes the articles of incorporation and approves the original bylaws, does much of the initial fundraising and hires staff as the organization takes shape and becomes an entity in and of itself. This initial all-volunteer period can prove to be very challenging for new organizations, making it essential that initial board members are dedicated to the nonprofit's mission and to the success of the organization.

Step 4: Check for Availability and Reserve a Name. Not only is it Minnesota law, but it is crucial to your new organization's identity to obtain a unique name under which to operate. Any potential name for a new business or nonprofit can be checked through the Minnesota Secretary of State's Office. Organizations can also reserve a unique name through the Minnesota Secretary of States Office. Once a name is reserved, no other organization may use that name.

Step 5: Write the Articles of Incorporation. The founders of the organization should write its articles of incorporation. This document formally names the entity, its location and its purpose. This document is the legal record of how the organization is to be managed. The Minnesota Nonprofit Corporation Act, Section 317A of the Minnesota Statutes, lists laws that govern Minnesota nonprofit corporations. It is important to remember when drafting the original articles of incorporation that parts of the Minnesota Nonprofit Corporation Act state the default laws that nonprofits must follow, unless their articles or bylaws state otherwise.

It is necessary to write and file the articles of incorporation prior to applying for tax-exempt status from the Internal Revenue Service. The IRS requires specific language to be used describing the charitable purpose of the
http://www.minnesotanonprofits.org/nonprofit-resources/start-a-nonprofit/alternativeshttp://www.sos.state.mn.us/http://www.sos.state.mn.us/http://www.sos.state.mn.us/https://www.revisor.mn.gov/statutes/?id=317Ahttp://www.irs.gov/charities/index.html?navmenu=menu1

organization, and the requirements it must follow for exemption. Please note the sample articles of incorporation provided by the Secretary of States Office do not include this information.

Step 6: Incorporate as a Nonprofit Organization. The main purpose of incorporating an organization is that of risk management. Filing articles of incorporation with the Minnesota Secretary of States Office provides a limited liability for the governing body of the organization. If directors act in a responsible and reasonable way, they can avoid personal liabilities to creditors of the organization. However, this does not include debts to the Internal Revenue Service for due payments or due to fraudulent activities.

Incorporating an organization also provides stability during personnel changes, eases future relationships with funders, contractors and employees, and provides the means to apply for tax-exempt status through the IRS. Once the articles are filed, the organization will receive a Certificate of Incorporation from the Minnesota Secretary of States Office. This certificate includes a charter number unique to that organization. The charter number is used only internally by the Secretary of State. To incorporate, send your organization's Articles of Incorporation to the Minnesota Secretary of State, Business Services Division. The filing fee is $70.

A nonprofit's Articles of Incorporation only needs to be submitted once, but the nonprofit will be responsible for annually filing with the Secretary of State. Amendments can also be made to a nonprofit's articles of incorporation, including a fee of $35.

Step 7: Create a Business Plan with a Budget. Creating a thoughtful business plan during the beginning stages of a new nonprofit can provide a sense of direction to the organization as it develops. A plan should include what the organizations goals are, what programs it will operate, where it will get funding, whether or not it will conduct events, have staff, volunteers, and more. It should also include a budget plan that includes where funding will come from, whether or not programs will rely on grants, individual donations, state or federal contracts, as well as expected expenses.

A business plan and budget are not only useful in thinking through the structure of the organization, but they are required as part of the narrative section of IRS Form 1023, Application for Tax-Exempt Status.

Step 8: Draft the Corporate Bylaws. The bylaws serve as the rule book for the nonprofit. Section 317A of the Minnesota Statutes is the basis for Minnesotas nonprofit law, and the organizations bylaws should follow this law. There is substantial flexibility to writing the organizational bylaws to fit the uniqueness of an organization. They are flexible and relatively easy to amend as the organization changes and grows.

Bylaws are much easier to amend than the articles of incorporation and should be reviewed frequently. This document should be more detailed then the articles of incorporation and address the following organizational issues:

Membership: Whether or not the organization will have members, who they are, how and when membership meetings will occur, what notice is required for meetings, requirements of a special meeting, quorum and voting.

Board of directors: The number of directors, election process, meetings, length of term, number of terms allowed, vacancies, removals, quorum, officers and standing committees.

Fiscal management: The fiscal year, committee and officer responsibilities, compensation of directors, reporting requirements and dues.

Amendments: How will amendments be made and approved.

A nonprofit's bylaws need to be submitted to the IRS when filing Form 1023 for tax-exempt status. Bylaws do not need to be resubmitted every time they are amended, but the IRS can request a nonprofit's bylaws at any time.
http://www.sos.state.mn.us/index.aspx?page=1175http://www.sos.state.mn.us/index.aspx?page=1086http://www.sos.state.mn.us/index.aspx?page=1086http://www.irs.gov/pub/irs-pdf/f1023.pdfhttp://www.minnesotanonprofits.org/nonprofit-resources/start-a-nonprofit/steps/fedfiling

Step 9: Hold the First Meeting of the Board. The first official meeting should consist of the initial board members or incorporators. This gathering marks the official start to the organization.

At the first meeting of the board, the initial board members must approve the drafted bylaws and adopt its principles. The new organization will also vote on new board members and officers as it is called for in its bylaws. Once these activities are accomplished, the board should begin forming the mission and start the process of obtaining tax-exempt status.

Step 10: Apply for Federal ID Number (EIN). Nonprofit organizations should have an EIN, often referred to as a Federal ID Number, even if it has no employees. The EIN acts similarly to a social security number for individuals and may be requested when opening a bank account or during other fiscal operations. Organizations must be incorporated before applying for an EIN and must have an EIN before applying for tax-exempt status. For more information, visit the IRS website.

Step 11: Obtain Income Tax Exemption from the IRS. Once the organization's articles of incorporation have been filed and the bylaws have been approved by the initial board of directors, the next step for a new nonprofit is applying for federal tax exemption from the Internal Revenue Service. A common myth is that all nonprofits are automatically tax- exempt. This is not the case.

There are several steps and filing requirements an organization needs to complete before receiving exemption. And even then, not all organizations qualify for the same exemptions. The following steps applies for 501(c)(3) status from the IRS, the most common type of tax-exempt organization.

1. Read IRS Publication 557, Tax-Exempt Status for Your Organization. This 55-page document includes no forms to file, but lays out the federal laws regulating tax-exempt organizations. It is available free and serves as a useful reference guide for filing requirements, employment issues, lobbying expenditures, and many other complex nonprofit issues regulated by IRS codes.

2. Fill out IRS Form 1023, Application for Recognition of Exemption. Form 1023 applies for a ruling or determination letter on an organizations exempt status under Section 501(c)(3). An estimated average of 60 hours will be spent filing Form 1023.

3. Fill out IRS Form 8718, User Fee for Exempt Organizations Determination Letter Request. Form 8718 is used to process the fee for applying for tax-exempt status and must be included when filing Form 1023. Organizations applying for exemption under another 501(c) section should file IRS Form 1024.

4. The filing fee is $850 for organizations anticipating gross receipts averaging more than $10,000 during its first four years and $400 for organizations anticipating gross receipts averaging less than $10,000 during its first four years.

Step 12: Apply for Sales Tax Exemption Some nonprofits qualify for exemption from sales tax on purchases through the Minnesota Department of Revenue. This exemption allows purchases on office supplies, furniture, vehicles, computer equipment and other taxed items to be purchased without a 6.5 percent (7 percent in Minneapolis and St. Paul) sales tax. Most exemptions are given to purely educational or direct service organizations.

To apply for sales tax exemption, organizations must complete and submit Form ST16, Application for Nonprofit Exempt Status Sales Tax

Step 13: Receive Tax Identification Number If the organization will sell products or services subject to Minnesota sales tax, withhold Minnesota income taxes from employees, pay MinnesotaCare taxes or special taxes, or is a vendor of goods or services to a state government agency, the organization must receive a tax identification number from the Minnesota Department of Revenue.

To obtain a tax identification number, complete and submit Form ABR, Application for Business Registration. Organizations must submit this form if they register for at least one type of tax, including sales and withholding taxes, income tax, and excise and gross receipts taxes. The package also includes registration forms for each of these taxes and instructions.
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-onlinehttp://www.irs.ustreas.gov/pub/irs-pdf/p557.pdfhttp://www.irs.gov/pub/irs-pdf/f1023.pdfhttp://www.irs.gov/pub/irs-pdf/f8718.pdfhttp://www.irs.gov/pub/irs-pdf/f1024.pdfhttp://www.revenue.state.mn.us/forms_and_instructions/st16.pdfhttp://www.revenue.state.mn.us/forms_and_instructions/st16.pdfhttp://taxes.state.mn.us/business_taxpayers/Documents/abr.pdf

Step 14: Register as a Charity The Charitable Solicitation Act, Chapter 309 of the Minnesota Statues, states that nonprofits must register as a charity with the Attorney Generals Office, Charities Division. An organization does not need to register only if it meets one of the following three conditions:

1. does not hire staff or a professional fundraiser and does not plan to receive more than $25,000 in total contributions;

2. is a purely religious organization; or

3. 3. is a private foundation that does not solicit contributions more than 100 persons during a fiscal year.

An organization must register with the Attorney General before soliciting contributions. File a Charitable Organization Registration Statement with a copy of the organization's articles of incorporation, IRS determination letter, and most recent financial statement. The filing fee is $25.

Step 15: File Annual Registrations Annual reporting ensures nonprofits are held accountable for their charitable fundraising and annual expenditures. Qualifying organizations must submit the following three types of documentation annually.

1. IRS Form 990, Return of Organizations Exempt from Income Tax. This is the most detailed and most misunderstood filing for nonprofits. It is a complete documentation of an organizations financial history and is often used to hold the organization accountable for its past actions and future decisions. Recent rulings by the IRS state that nonprofit organizations must make their Form 990 and applications for tax-exempt status widely accessible and available to anyone upon request. The Form 990 is available on the IRS website.

2. IRS From 990EZ, Short Form - Return of Organization Exempt From Income Tax. This filing is for nonprofits with gross receipts less than $200,000 or total assets that are less than $500,000 at the end of the year.

3. IRS Form 990N, e-postcard. This filing is for nonprofits with gross receipts less than or equal to $50,000.

4. Charitable Organization Annual Report Form. The Charitable Solicitation Act states that an Annual Report Form must be filed with the Attorney General by the 15th day of the 7th month after the close of the organization's fiscal year. An organization must also include a copy of IRS Form 990 and an audited financial statement, if applicable.

5. Nonprofit Corporation Annual Registration. After an organization has filed for incorporation, it must continue to file an online Annual Registration with the Minnesota Secretary of State. If any information has changed since the last annual filing, the organization will need to amend its articles of incorporation. Failure to register by December 31 each year will result in the dissolution of the organization, and a $25 fee will apply to reinstate the organizations corporate existence. Nonprofits can file their Annual Business Renewal online.
http://www.ag.state.mn.us/charities/Forms/CharTrustRegStatmnt.pdfhttp://www.ag.state.mn.us/charities/Forms/CharTrustRegStatmnt.pdfhttp://www.irs.gov/pub/irs-pdf/f990.pdfhttp://www.irs.gov/pub/irs-pdf/f990.pdfhttp://www.irs.gov/charities/index.html?navmenu=menu1http://www.irs.gov/pub/irs-pdf/f990ez.pdfhttp://www.irs.gov/Charities-%26-Non-Profits/Annual-Electronic-Filing-Requirement-for-Small-Exempt-Organizations-%E2%80%94-Form-990-N-%28e-Postcard%29http://www.ag.state.mn.us/Charities/InstructionsAR.asphttp://www.ag.state.mn.us/Charities/InstructionsAR.asphttps://online.sos.state.mn.us/abr/corp_annual_filing.asphttps://online.sos.state.mn.us/abr/corp_annual_filing.aspStep 1: Determine if it is Necessary to Start a Nonprofit.Step 2: Decide on the Purpose and Mission.Step 3: Recruit Board Members.Step 4: Check for Availability and Reserve a Name.Step 5: Write the Articles of Incorporation.Step 6: Incorporate as a Nonprofit Organization.Step 7: Create a Business Plan with a Budget.Step 8: Draft the Corporate Bylaws.Step 9: Hold the First Meeting of the Board.Step 10: Apply for Federal ID Number (EIN).Step 11: Obtain Income Tax Exemption from the IRS.Step 12: Apply for Sales Tax ExemptionStep 13: Receive Tax Identification NumberStep 14: Register as a Charity

Connecting volunteer lawyers with microbusinesses and nonprofits

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CHOICE OF ENTITY

General Considerations:

When starting a business, the choice of entity or legal form for the business is one of the most fundamental

decisions the founders must make. The choice of entity for a business will have consequences for the liability of the owners, taxes, and the flexibility/complexity of governance. The founders should compare each entity type and choose an entity according to the circumstances and the long-term plans of the business and the owners.

The most common forms of legal entities are C-corporations, S-corporations, limited liability companies

(LLC), partnerships, and sole proprietorships. Each has a different formal structurefor example, corporations are owned by shareholders, while LLCs are owned by members, and partnerships are owned by partners. A sole proprietorship is owned and run by an individual.

Small businesses most commonly choose to be organized as an S-corporation or an LLC, because they

share two favorable characteristics: (1) limited liability for the owners in most cases; and (2) favorable tax treatment. For this reason, the discussion in this memorandum focuses mainly on these two types of entities.

Limited Liability:

Limited liability protection is one factor to consider when selecting a business's legal form. Only certain

legal entities offer limited liability. One of the primary reasons to create a legal entity is to separate the businesss liabilities from the assets of the owners. If the entity does not provide limited liability protection, a creditor may be able to seize the owners personal property if obligations are not met by the business, or if the business is held liable in a lawsuit. With limited liability protection, a creditor or plaintiff may generally only take the property of the business itself, but not the personal property of the owners.

Shareholders of a corporation and members of an LLC are not personally liable for debts and obligations of

the entity, including contracts and tort liabilities; only their initial investment is at risk if the entity fails.1 The individual in a sole proprietorship or partners in a general partnership are personally responsible for all debts and obligations of the entity. The limited partners receive limited liability protection and are only liable for their initial investment; however, the general partners in the LP are personally liable for the entitys debts and obligations. Partners in a LP can elect limited liability protection and become limited liability limited partnerships (LLLP). In a LLLP, all partners receive limited liability protection. Partners in a limited liability partnership (LLP) are protected from liabilities of the partnership. However, LLPs and LLLPs involve formal requirements for maintaining limited liability, compared to corporations and LLCs where the limited liability is automatic.

Income Taxes:

S-corporations, LLCs, and partnerships feature pass-through taxation, where only the individual owners are taxed at their ordinary income rates and not the entity itself. A C-corporation features a double tax that is usually disadvantageousthe entity is taxed at the corporate level, and individuals are then taxed on distributions of profits, such as dividends. An S-corporation must meet several technical requirements to maintain its favorable

1 In certain circumstances, such as fraud or misappropriation of corporate funds, a court may pierce the corporate veil and allow a creditor to take the owners personal property. See LegalCORPS Tips for Preserving the Corporate Veil pamphlet.



tax status: (1) it must make timely filings with the IRS; (2) there must be fewer than 100 shareholders; (3) all shareholders must be natural persons and U.S. citizens or residents; and (4) there can only be one class of stock. The LLCs favorable tax treatment, on the other hand, is automatic unless it elects to be taxed like a C-corporation.

LLCs Compared to Corporations:

Corporations and LLCs feature different terminology for similar concepts. An owner of an LLC is a member. An LLC member is similar to a shareholder in a corporation.

An LLC member's ownership interest in the LLC is called a membership interest rather than shares of

stock. The member's membership interest is a percentage of the overall interests in the LLC. In contrast, a shareholder in a corporation owns a certain number of shares of stock. A corporation is governed by a board of directors, while an LLC is governed by a board of governors, although the LLC can be governed by the members. This is especially common when a single member owns 100 percent of the membership interest. In a corporation, the business is run by officers, whereas in an LLC, the business is run by managers.

LLCs and S-corporations are similar in that both entities limit the owners liability and both have pass-

through taxation, unlike C-corporations that have double taxation. The LLC form is more flexible than the S-corporation because there are no restrictions on who can own LLC interests.

Flexibility and Complexity:

Flexibility can be crucial to the success of a young business because of the need to adapt quickly to a changing environment. However, flexibility must be balanced with the burden of additional costs and the complexities involved with a certain entity. Corporations require certain formalities, such as shareholder meetings, but governance is simple and well understood. LLCslike partnershipsallow more flexibility than corporations in how profits and losses will be shared. Also, LLCs are relatively easy and inexpensive to form, maintain, and dissolve. However, the agreements governing LLCs tend to be longer and more complex than corporate governing documents, especially where there are multiple owners. Finally, accounting and taxes are much simpler for C-corporations than for pass-through entities since C-corporations are taxed as separate entities. However, the double tax element of C-corporations is generally considered a disadvantage.

Conclusion:

Founders must balance many things when deciding what type of entity to form when starting their business. These decisions are complex and are dependent on the individuals involved. Generally speaking, it is much easier to form a legal entity correctly at the start, rather than trying to fix the formation documents after the business has begun operations. Founders should seek advice from an attorney and an accountant before forming a legal business entity.2

This publication is for general information purposes only and is not to be considered legal advice. You should not rely on any information or views contained in this publication in evaluating any specific legal issues you may have. Please consult your attorney for specific legal advice. Any U.S. federal tax advice contained in this communication (whether distributed by mail, e-mail, or fax) is not intended or written to be used, and it cannot be used by any person for the purpose of avoiding U.S. federal tax penalties or for the purpose of promoting, marketing or recommending any entity, investment plan or other transaction. (The foregoing legend has been affixed pursuant to U.S. Treasury Regulations governing tax practice.)

2 Additional Resources: A Guide to Starting a Business in Minnesota, Minnesota Department of Employment and Economic Development.



Choice of Entity Comparison Chart:

Formation Documents

Ownership/ Governance

Taxation Liability Advantages Disadvantages

LLC

Articles of Organization;

Member Control Agreement

Owned by members; governed

by board of governors; run by

managers

Pass-though taxation, may choose

tax at entity level

No personal liability for members

subject to the corporate veil

holding up*

Limited liability, flexibility, and pass-

through taxation

Difficult to transfer ownership; complicated documents,

especially with multiple owners

S-corporation Articles of Incorporation;

Bylaws, Shareholder Agreement

Owned by shareholders;

governed by board of directors; run by

officers

Pass-through taxation of

shareholders; several requirements must be met to maintain tax

status, including following restrictions

on the number of shareholders, the type of shareholders, and

the kind of stock

No personal liability for

shareholders, directors, or officers


holding up*

Limited liability and

pass-through taxation

Restrictions on number and types of

shareholders and other technical

requirements for maintaining tax

status; not as flexible as LLC in structure

C-corporation Articles of Incorporation;

Bylaws, Shareholder Agreement

Owned by shareholders;

governed by board of directors; run by

officers

Double taxcorporate tax of profits at entity

level, and second level tax on

distributions to shareholders

No personal liability for

shareholders, directors, or officers


holding up*

Limited liability, easy for investing,

and easy to transfer ownership

Double tax; not as flexible as LLC in

structure

*See LegalCORPS Tips for Preserving the Corporate Veil pamphlet, describing how to preserve corporate formalities; there may also be personal liability in cases of fraud or intentional or reckless misconduct.



Tips for Preserving the Corporate Veil

A creditor who is allowed to pierce the corporate veil may attack a business owners personal assets in addition to the assets of the corporate entity. The following tips may help to avoid the corporate veil from being pierced in a corporation or limited liability company (LLC)1: Keep clear divisions between the business owner(s) and the entity. One way to distinguish the business owner from the entity (corporation or LLC) is to avoid the comingling of funds, which occurs when a business owner uses company money to pay for personal expenses or moves money back and forth between business and personal accounts. It is very important to establish a separate bank account for the entity and to have all financial transactions run through that account. Business expenses should be paid from that bank account, and all checks to the business should be payable to the entity. Business owners may also separate themselves from the corporate entity by distinguishing their personal property from property owned by the corporation and maintaining separate tax returns. Maintain corporate records. The corporate entity should keep corporate records documenting the financial structure and capitalization of the corporate entity. Observe corporate formalities. This includes filing with the secretary of state, holding periodic corporate meetings of the principals and officers of the corporation, and preparing corporate tax returns. It is very important that all contracts are signed in the name of the entity. Capitalize the business. The corporate entity should have reserve funding (i.e. capital) and insurance to cover operating expenses and potential liabilities. A court will look negatively upon a corporate entity that was never properly funded and is insolvent at the time of transaction. Note: Even if the owners maintain the formalities described above, courts will impose personal liability if the owners are found to have engaged in fraud or acted intentionally or recklessly to injure someone or cause loss. For example, a court may determine there was fraud if investors were told money would be used for a specific purpose for which it was not actually used. This publication is for general information purposes only and is not to be considered legal advice. You should not rely on any information or views contained in this publication in evaluating any specific legal issues you may have. Please consult your attorney for specific legal advice.

1 Under Minnesota law, the conditions and circumstances under which the corporate veil may be pierced are the same for both corporations and LLCs.



Intellectual Property

Purpose of Intellectual Property: To encourage creativity and innovation by preventing others from using your ideas without your permission after you have established a legal claim to those specific ideas. The four main mechanisms for protecting intellectual property include patents, trademarks, copyrights, and trade secrets.

Patents: Patent law protect an invention from being made, sold, or used by others for a certain period of time (typically 20 years from the time of a patent application filing). To protect a patent, an individual must apply for a patent with the US Patent and Trademark Office (USPTO). Since the filing paperwork can be complex, it is recommended that you seek counsel from an attorney specializing in patent law. Trademarks: Trademark law creates usage rights in words, phrases, symbols, and other indicators that identify the source or sponsorship of goods or services. Trademarks are automatically assumed once a business begins using a certain mark to identify its company, and may use the symbol TM without filing their symbol or name with the government. Registration of a mark with the USPTO or the state provides a presumption of validity and other benefits. However, trademark law does not afford much protection to trademarks that are merely descriptive of the goods or services that they represent. Copyrights: Copyright law protects the fruits of creative efforts. A copyright owner enjoys the exclusive right to reproduce the work, distribute it, display or perform it, and to create derivative works from it, as well as the ability to transfer any or all of these rights. Copyright protection generally lasts for seventy years beyond the death of the original author. Copyrights do not protect ideas, only how they are expressed. Registration is not required, however it is necessary to enforce a copyright holders rights and it may provide additional benefits and remedies. Trade Secrets: Trade secrets law protects confidential information that a company or other organization creates or compiles to give it an economic advantage over its competitors. Trade secret owners must preserve their trade secret through proper security, access control, clear identification, and confidentiality and non-disclosure agreements. This publication is for general information purposes only and is not to be considered legal advice. You should not rely on any information or views contained in this publication in evaluating any specific legal issues you may have. Please consult your attorney for specific legal advice.


Applying for a Patent A patent is a type of property right. It gives the patent holder the right, for a limited time, to exclude others from making, using, offering to sell, selling, or importing into the United States the subject matter that is within the scope of protection granted by the patent. The United States Patent and Trademark Office determines whether a patent should be granted in a particular case. Patent duration is either 20 years for a utility patent or 14 years for a design patent. Patents are not renewable. 1. File an Application with Drawings to the USPTO a. Provisional application: The Application is not examined but approval only gives you a patent pending status. The maximum duration is one year. Allows filing without a formal patent claim, oath or declaration, or any information disclosure (prior art) statement. Can be filed up to twelve months following the date of first sale, offer for sale, public use, or publication of the invention, whichever occurs first. See 35 U.S.C. 111(b).

A written description of the invention, complying with all requirements of 35 U.S.C. 112, and any drawings necessary to understand the invention, complying with 35 U.S.C. 113, must be filed electronically or by mail. If either of these items are missing or incomplete, no filing date will be accorded to the provisional application. To be complete, a provisional application must also include the filing fee as set forth in 37 CFR 1.16(d) and a cover sheet identifying:

1. The application as a provisional application for patent; 2. The name(s) of all inventors; 3. Inventor residence(s); 4. Title of the invention; 5. Name and registration number of attorney or agent and docket number (if applicable); 6. Correspondence address; and 7. Any U.S. Government agency that has a property interest in the application.

b. Non-provisional application. A non-provisional application is examined by a patent examiner, and may be issued as a patent if all the requirements for patentability are met. The Application may be filed electronically or by mail, however, there may be additional fees if the Application is not filed electronically. See 35 U.S.C. 111(a).

A complete non-provisional utility patent application should contain the elements listed below, arranged in the order shown:

1. Utility Patent Application Transmittal Form or Transmittal Letter; 2. Appropriate Fees; 3. Application Data Sheet (see 37 CFR 1.76); 4. Specification (with at least one claim); 5. Drawings (when necessary); 6. Executed Oath or Declaration; 7. Nucleotide and/or Amino Acid Sequence Listing (when necessary); and


8. Large Tables or Computer Listings (when necessary). 2. Communication from the USPTO Called an Office Action

An office action will be issued by the USPTO after the Application has been reviewed. Make careful note of the deadline in which to respond to the office action. A structured response is necessary.

3. Next Communication from the USPTO Likely to be Final Office Action

a. Options if the Application is Declined

1. Walking away is always an option. The patent is lost but no additional fees are incurred. 2. File a continuation application to argue with the Examiner. New filing fees incurred. 3. Appeal if you feel firmly that the Examiner is wrong. This is costly and takes a long time.

b. Next Steps if the Application is Approved

1. Notice of Allowance Issued 2. Issue Fee Paid 3. Patent Issued

5. Maintenance Fees Must be Paid at 3.5, 7.5 and 11.5 Years Additional Resources Patent and Trademark Depository Library LegalCORPS Investor Assistance Program Minneapolis Central Library http://legalcorps.org/inventors/inventors 300 Nicollet Mall Minneapolis, MN 55401 612-543-8095 Minnesota Inventors Congress United States Patent and Trademark Office Deb Hess, Programs Director www.uspto.gov (507) 627-2344 http//www.uspto.gov/inventors/patents.jsp www.minnesotainventorscongress.org

Local Inventors Groups Inventors Network Innovators and Entrepreneurs (meets monthly, 3rd Tues of the month) [email protected] Eisenhower Community Center Clyde Hanson (612) 418-1192 1001 Highway 7, Hopkins, MN 55403 Meetup Host and Founder http://mninventornetwork.webs.com/

Revenue Streams

Channels

Customer Relationships Customer SegmentsValue PropositionsKey ActivitiesKey Partners

Key Resources

Cost Structure

www.businessmodelgeneration.com

The Business Model Canvas On:Iteration:

Designed by:Designed for:Day Month Year

No.

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring frompartners?Which Key Activities do partners perform?motivations for partnerships:Optimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships? Revenue Streams?

types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?categoriesProductionProblem SolvingPlatform/Network

What value do we deliver to the customer?Which one of our customers problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?characteristicsNewnessPerformanceCustomizationGetting the Job DoneDesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability

For whom are we creating value?Who are our most important customers?What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established?

examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation

How are they integrated with the rest of our business model? How costly are they?Mass MarketNiche MarketSegmentedDiversifedMulti-sided Platformo

Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines?

channel phases:1. Awareness: How do we raise awareness about our companys products and services?2. Evaluation: How do we help customers evaluate our organizations Value Proposition?3. Purchase: How do we allow customers to purchase specifc products and services?4. Delivery: How do we deliver a Value Proposition to customers?5. After sales: How do we provide post-purchase customer support?

For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? types:Asset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising

fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent

dynamic pricingNegotiation( bargaining)Yield ManagementReal-time-Market

What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?is your business more:Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)sample characteristics:Fixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

Last Revised: 11/11/2014


accounts payable Money owed to others for goods and services received

accounts receivable Money owed from customers for goods and services sold

additional inventory Raw materials or finished goods that are ready or will be ready for sale, which are purchased to replenish existing inventory

amortization The paying off of debt in regular installments over a period of time

assets All resources owned by the business

balance sheet A financial statement that shows the companys financial position at a moment in timeall assets, all liabilities, and all equity

benchmarking Comparing companys results to the experiences of others of similar size and within the same industry

benefits Costs paid by company for employee-related items, such as Social Security, worker comp, health insurance, vacations, sick days, etc.

book value Sum of all assets, minus all liabilities = equity. The intrinsic value of the business owned by the stockholders

breakeven point Point at which total sales for a period of time = total expenses for that period of time (in other words, there is neither a profit nor a loss)

business concept An idea which can be used for commercial purposes

capital Long term money held in the business that is used to create profit

cash flow statement An analytical tool that demonstrates the short-term viability of a company, particularly its ability to pay bills

C-corp.A limited liability legal structure in which the company is taxed separately from its shareholders

collateral Property and goods used to secure repayment of a loan

cost of goods sold (COGS) Also called cost of sales or variable costs. The costs associated with a specific product, not including overhead costs, such as payroll or office supplies.

current Will occur within 12 months of the financial statement date

debt capital Debt raised by the business by taking out a loan

depreciation

Cost of expensing a fixed asset over its estimated useful life; Many people use Straight Line depreciation, equal amounts over the life of the asset, for management planning and reporting purposes. Accelerated depreciation might be used for tax reporting purposed. Consult your accountant for advice.

direct cost Cost that can be directly traced to producing specific goods or services


disbursements Money paid out

dividends paid Money paid to shareholders

equity (see book value)

expense Operating costs the business incurs through its efforts to earn revenue

financial projection Estimate of future financial outcomes (see forecast)

fixed expense Business expenses which must be paid every month, even if you have no customers (for example: rent, utilities, telephone, loan payments)

forecast Making statements about events which have not yet been observed

fringe benefits (see benefits)

funds management Management of cash flow

gross profit Revenue minus the cost of making a product or providing a service, but

before deducting overhead, payroll, taxes and interest payments

gross profit margin % Gross profit divided by total sales

income Revenue produced through sales of goods and services

income statement Analysis of financial performance over a period of time (also called the Profit and Loss statement, or P&L)

indirect cost Costs that are not directly accountable to a unit of production, also called overhead (such as taxes, administration, personnel, and security)

industry comparison (see benchmarking)

liabilities What the business owes to others

line of credit

The maximum credit a customer is allowed; This is usually arranged with a bank, and the borrower is allowed to borrow up to a pre-defined amount. This is generally used to maintain a certain minimum cash balance for the business.

long term Occurs later than 12 months from the financial statement date

model Computer program that uses facts and assumptions to simulate financial operations of a business

net profit Sum of total revenue and gains, less all expenses (including taxes) for a reporting period

net profit before taxes Sum of total revenue and gains, less all expenses except for income taxes for the reporting period

net profit margin % Net profit divided by total sales

operating expense Expenditures incurred in the normal course of business

overhead (see indirect cost)

owners distribution A payment of earnings to owners of a business



payment terms Conditions under which a seller completes a sale, including the time the customer has to pay off the amount due

profit & loss statement (see income statement)

profitable Excess of purchase price over the costs of bringing product or service to market

projected Estimated or forecast

ratios Calculations used to make numerical comparisons

receipts (see income)

revenue (see income)

sales (see income)

sales forecast Estimated sales for a time period

sales unit As used in the SCORE model, it is a product or service, or a group of products or services, regarded as a single line-item entry in the sales forecast

S-corp

A limited liability legal structure in which the corporation's income or losses are divided among and passed through to its shareholders who then report the income or loss on their own individual income tax returns

short term Occurs within 12 months of the financial statement date

sole proprietorship A business entity that is owned and run by one individual in which there is no legal distinction between the owner and the business

sources of funds Typical sources include profit from operations, debt from money borrowed, and sale of equity interest to shareholders

spreadsheets

An interactive computer application use for analysis of information in a tabular form. These are frequently used for financial information because of their ability to re-calculate the entire sheet automatically after

a change to a single cell is made.

subcontract Individual or business who signs a contract to perform part or all of the

obligations of another's contract


Your Ultimate Guide to Small Business Financing
http://ondeck.com/score

Finding capital to finance growth is one of the biggest challenges facing a small business owner today. Technology is changing the way small business owners acquire funding, for the better.

The Lending Landscape

of all business owners who applied for financing applied for a loan or line of credit(in 2015)83%

SOURCE: Report SBCS 2015 non-employer firms

| 2Section 1 | Introduction

Many online lenders are leveraging technology to safely and securely analyze your business to make approval decisions faster than ever. And more businesses are approved because this technology uses more than just your personal credit score to make a decision.

Over the last few years, your options for business financing have increased (for your benefit), which is why its important for you to be better informed and savvier about your options when you approach the small business loan process.

Click here to learn more about OnDeck
http://ondeck.com/scorehttps://www.ondeck.com/score

Small Business Financing Options

| 3Section 2 | Small Business Financing Options

Lend larger amounts

Often require very specific, high value collateral

Long application process

Significant paperwork

Personal credit score-based evaluation

Short application process

Less paperwork requirement

A more data-driven approach

Online LendersTraditional Lenders

Lend smaller amounts

Can work with younger businesses

Often require blanket lien on entire business rather than specific collateral

Technology has opened the financing door to many more small businesses, with that, its also doubled the amount of research you must do before you can make the best decison for your business. Its good for you to know exactly what types of financing services are available for small business owners to look into. This overview will take you through the basics of what you need to know.


Bank Term Loan

A bank term loan is a loan that is repaid over a set period of time. They vary based on your business and each individual bank. As a general rule, banks prefer to make larger business loans. The average small business bank loan is for $500,000 with 3-10 year terms. To qualify for a loan at the bank, you will need excellent personal credit and a strong business history. The application for a bank loan typically takes weeks or months.

Business Line of Credit

A Line of Credit is a revolving loan that gives business owners access to a fixed amount of money, which they can use day-to-day according to their needs. A line of credit is a flexible tool for business owners, but is one of the most difficult types of financing to qualify for. To qualify for a small business line of credit at the bank, you will need excellent personal credit, a strong business credit history, and may be required to have specific collateral.

Traditional FinancingBusiness financing is as old as businesses themselves. Traditional financing refers to financing options that until recently were the only ways for small businesses to access funding.

| 4Section 2 | Small Business Financing Options

% of small business owners who apply for financing by type

Loan or Line of Credit

Credit Card

Equity Investment

Leasing

Trade Credit

Other

Factoring

83%

39%

6%

10%

8%

5%

3%


SBA Loans

SBA loans come from participating banks, credit unions, and other licensed non-bank lendersnot from the SBA itself. The loans are partially guaranteed by the U.S. Small Business Administration (SBA). The SBA offers a range of loan programs from micro loans, in the $5,000 range to long term larger loans for millions of dollars. The application and approval process typically takes weeks to months.

Merchant Cash Advance

A merchant cash advance (MCA) isnt technically a loan, but rather a cash advance based upon the credit card sales of your business. A small business can apply for an MCA and have an advance deposited into its account fairly quickly.

An MCA provider will fund a business and then hold back a percentage of credit card sales until the advance and all fees are paid off. An MCA typically comes with a shorter term and a higher rate than a traditional loan.

$ 30bn+

$ 200m-$ 300m

$ 40m-$ 50m

$ 20m - $ 30m

$ 10m - $ 20m

$ 5m - $ 10m

Factoring

Factoring is technically not a loan and is sometimes referred to as a lockbox at lenders that offer this service. It can be useful for any business that doesnt have other assets to offer as collateral and need capital quickly.

A factor is a third party that purchases part, or all, of a companys accounts receivables in exchange for a percentage of the invoice. The factor then owns the outstanding invoices and collects from the customers directly. The factor earns a profit from the difference between the discounted rate negotiated to buy the account receivables, and the full invoice amount collected from the customer.

Equipment Leasing

Leasing equipment can be a good alternative to taking out a loan if the equipment you need will become outdated and/or need to be replaced quickly. Many lease agreements allow for the purchase of the equipment at the end of the lease. Leases can be attractive because the payments are often less than a loan.

Top 5 sectors in the US & Canada who use alternative financing

| 6

Construction

Finance

Business & Professional Services

Technology

Retail & Wholesale

SOURCE: 2016 Americas Alternative Finance Benchmarking Report Click here to learn more about OnDeck

Section 2 | Small Business Financing Options

Equipment Financing

Equipment Loan

Unlike larger general-purpose small business loans, equipment loans can be for smaller amounts, which can make them easier to obtain. The equipment being purchased is usually used as collateral for the loan.

Online Term Loan

Online loans are similar to traditional term loans in that they have a set term, periodic payments, and an interest charge, but some lenders differ in their approach to qualification criteria which allows greater access to capital to more businesses. These lenders use technology to evaluate businesses differently from traditional lenders. For example, online lenders may access a business transactions and cash flow via their online business checking account or examine other digital data points to analyze a business. The use of technology allows for a simple application, flexible loan amounts, and quicker decisions to a loan application.

Online Line of Credit

An online business line of credit works the same as a more traditional line of credit with an application process similar to online term loans. Many online lenders use the same application for both term loans and lines of credit to simplify the process and make it easier for business

Over the past several years, online lending has grown exponentially. The qualification criteria used by many online lenders as they evaluate a business creditworthiness is different from the criteria used by traditional lenders. So, some businesses that wouldnt qualify for a loan at the bank might qualify for an online loan.

Online Financing

Top Business Challenges 2015

| 7


3% Other

6% Government regulations

9% Taxes

16% Credit availability

20% Cash flow

18% Costs of running business

22% Revenues/Sales

6% Hiring and/or retaining qualified staff



Crowdfunding

Crowdfunding mobilizes a group of people to dedicate small amounts of money towards a common goal, such as the creation of a product, the funding of a non-profit, or the birth of a small business.

Most crowdfunding sites require you to establish a financing goal and that you reach your goal to receive any monies raised, while others allow you to collect what you raise without meeting your goal, but charge a higher fee. Most successful crowdfunding campaigns offer some kind of premium, that may be an early release of the product or something else of value.

A newer form of crowdfunding allows the business owner to offer ownership equity for an investment in their business. The federal government requires these investors to be accredited investors, and the state where you do business will likely have additional requirements that youll need to investigate before you determine which type of crowdfunding is better for your business.

Loan Matching Sites

Loan matchmakers dont actually make loans; they help small business owners by introducing them to lenders that offer a wide variety of small business loan products ranging from online business loans to SBA loans.

US Online Alternative Finance Total Volume2013 - 2015 ($USD)

| 8

$ 0bn

$ 5bn

$ 10bn

$ 15bn

$ 20bn

$ 25bn

$ 30bn

$ 35bn

$ 40bn

2013 2014 2015

$ 4.40bn

$ 11.56bn

$ 36.17bn




TRADITIONAL BUSINESS LOANS NON-BANK BUSINESS LOANS OTHER NON-BANK PRODUCTS

Bank Term Loans SBA LoansShort-Term Online

Business LoansLong-Term Online

Business LoansMerchant Cash

AdvanceFactoring Equipment Lease

Personal Credit Score Requirement

680+ 650+ 500+ 600+ 500+ 500+ 600+

Time in Business Requirement

2+ years 0 years 1+ years 1+ years 6+ months 1+ years 1+ months

Revenue/Cash Flow Requirement

Likely to require 2+ years of profitability

Need business plan and good financial

records or projections

$100,000 annual revenue required


Must have $5,000/month from credit

card sales

Business must have a guaranteed and

steady receivable cash flow


Specific Hard Collateral Required (Real Estate, Equipment)

Yes Usually No* No* No* No*Equipment being

purchased

Loan Terms 3 - 10 years 5 - 25 years 3 - 24 months 1 - 5 years Typically 3 - 18 monthsCan factor individual

invoices or enter 1+ year agreements

2 - 10 years

Amount Available from Lender

$50,000+ depending upon the bank.

Typically prefer larger loans, Average loan

size $500,000

Starting at $10,000. Average loan size

$350,000$5,000 - $250,000 $5,000 - $500,000 $5,000 - $500,000 $100,000 - $2,000,000

$100,000 - $2,000,000+

Time from Application to Funding

14 - 60 years 30 - 90 days As fast as same day As fast as 5 days As fast as 2 days As fast as 5 days As fast as 5 days

*May require a general lien on corporate assets and/or a personal guarantee. Disclaimer: This chart is based on general observations and each lender may vary their offerings and requirements.

| 9

What Type of Financing Can I Get Approved For? Before you apply, its good to have an idea of the type of financing you may qualify for. This will help you avoid wasting time filling out applications for financing that may not be a good fit for your business situation.


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